The European Union is at risk of entering a period of political deadlock at a time when it needs to negotiate its largest budget in history, find new funds for Ukraine, and deal with increasing pressures from the United States, Russia, and China.
The situation is complicated by political issues in the four largest European economies – Germany, France, Italy, and Spain – which are gearing up for elections or experiencing periods of instability. Together, these countries represent approximately 60% of the EU’s economy and population.
Europe is thus heading towards a "perfect political storm," writes Politico, in an analysis that highlights how challenging it will be for Brussels to secure the agreements it needs in the coming months.
The first signs emerged at last week's European summit. After two days of negotiations, EU leaders made no significant progress on the budget of around 2 trillion euros and instead engaged in heated disputes over energy policy.
Furthermore, the summit's conclusions did not include any commitment to reaching a budget agreement by the end of the year, despite European Council President António Costa insisting on this deadline.
"Everyone understood that we needed to reach a political agreement by the end of the year," said Cypriot President Nikos Christodoulides to Politico. However, he believes that the elections in Spain make it impossible to meet the deadline, and those in France, Italy, and other states scheduled for next year will further complicate the negotiations.
Four major economies, four political issues
Spain is holding elections on November 29, and polls indicate the possibility of the right and far-right taking power after eight years of governance by socialist Pedro Sánchez.
The Spanish Prime Minister will be in the midst of an electoral campaign during the European meetings on November 13 and 26. Regardless of the election outcome, the formation of a new government in Madrid is expected only in January, which could delay budget negotiations.
In France, Emmanuel Macron's term ends in April 2027, and he cannot run for a third consecutive term. Marine Le Pen is leading in polls.
Four European diplomats cited by Politico said that during a closed-door discussion at the summit, Macron acknowledged that he would not have the political mandate needed to sign a EU budget agreement in the final months of his presidency.
In Germany, Chancellor Friedrich Merz faces a sharp decline in popularity and the rise of the far-right Alternative for Germany (AfD) party. Although the next federal elections are not scheduled until 2029, the political situation limits his ability to make compromises in Brussels.
Italy is also gearing up for elections in October 2027. However, a European diplomat believes that Prime Minister Giorgia Meloni could call for early elections.
"Next year will be worse," warned a senior European diplomat, speaking on condition of anonymity.
Pressures from three directions: USA, Russia, and China
Internal problems arise at a time when the EU faces major external challenges.
Donald Trump questions the traditional alliances that have underpinned European security for generations.
Russia is conducting a campaign of hostile actions on European soil, from cyberattacks and sabotage to drone incidents. These include an attempted attack on Leipzig airport, attributed to the Kremlin by German authorities.
China is strengthening its control over essential supply chains and putting pressure on the European industry through its cheap exports.
"Now we are being attacked from three directions: from the US, Russia, and China," said former Lithuanian Foreign Minister Gabrielius Landsbergis, currently a visiting researcher at Stanford University.
Belgian Prime Minister Bart De Wever also warned that external powers seek to divide Europe. "They are looking to divide us. They want us to be divided," he said, adding that EU adversaries know where they can make Europe vulnerable.
Ukraine needs tens of billions more dollars
One of the most urgent issues for Brussels remains the financing of Ukraine. According to IMF estimates, Kiev will face a budget deficit of 30-35 billion dollars next year, while Russia continues to target Ukrainian energy infrastructure ahead of winter.
This need for funding exists despite the 90 billion euros that the EU agreed to make available to Ukraine last year.
President Volodymyr Zelenski warned at the summit that a potential defeat for his country could lead to around 20 million Ukrainians seeking refuge in the European Union. "Russia is killing us. They don't want to stop," Zelenski said.
One possible solution for financing Ukraine could be to use the approximately 200 billion euros of Russian assets frozen at Euroclear, the Belgium-based financial institution.
However, even on this matter, member states have not reached an agreement. Belgium, which has blocked previous attempts to use these assets for Ukraine, maintains its opposition. "Nothing has changed," said Swedish Prime Minister Ulf Kristersson upon leaving the summit.
Another option could be the issuance of new common European debts, but this would require challenging political compromises.
Europe risks being left without leaders capable of negotiating compromises
In addition to political instability, Brussels faces the prospect of losing experienced national leaders who in the past could negotiate agreements between member states. "Now we have a Europe without an obvious leader," a European diplomat told Politico.
He noted that Ursula von der Leyen, the head of the European Commission, holds considerable power, but Europe currently lacks a leader of the stature of Angela Merkel or François Mitterrand.
European Council President António Costa, however, dismisses the idea that national elections should hinder the adoption of the budget. "We live in 27 democracies. We have elections almost every month. If we were to consider elections, we could never approve a new budget," Costa said.
He insists that negotiations should be concluded by the end of 2026 so that the new budget can be implemented from the beginning of 2028.
There are more summits scheduled in November and December, but if they do not produce an agreement, negotiations will extend into 2027, when electoral campaigns will make political concessions even harder to accept.
A senior European official believes that January 2027 could be the last favorable period for reaching an agreement before political instability worsens.
Romanian MEP Siegfried Mureșan, responsible for budget negotiations on behalf of the European People's Party, believes that European leaders have acted too slowly so far. "Time is running out," Mureșan warned.
G.P.